Retirement
Required Minimum Distribution
The minimum amount you must withdraw annually from certain retirement accounts starting at a specified age.
In more detail
Required Minimum Distribution is one of the foundational terms in retirement. Understanding it clearly helps you read financial documents, compare products, and avoid the kind of small misunderstandings that compound into expensive mistakes.
An example
Imagine you are evaluating a typical financial product where this concept appears. Knowing exactly what required minimum distribution means lets you ask the right follow-up questions, compare two options on an even footing, and choose what is best for your circumstances rather than what sounds best in marketing copy.
Related terms
- Roth IRA — A retirement account funded with after-tax dollars; qualified withdrawals are tax-free.
- 401(k) — An employer-sponsored retirement plan that lets you save pre-tax income, often with a match.
- IRA (Individual Retirement Account) — A tax-advantaged personal retirement account with annual contribution limits.
Definitions are general and educational. Specific products and laws vary by country and provider — confirm with the issuer before making decisions.